Botswana's Blacklisting By The EU Shows The Country's Lethargy In The Fight Against Corruption

Yesterday the European Commission which is the executive branch of the European Union, announced in a press release that Botswana, along with several other countries, has been added to the EU's blacklist of countries that have "strategic deficiencies in their anti-money laundering and countering terrorism financing regimes that pose a significant threat to the EU's financial system".

The blacklist is part of the EU's Action Plan against money laundering and terrorism financing and Botswana being listed on it means local companies will not be getting funding from the European Union until the country gets delisted and also creates a bad look for the country in the eyes of international investors who are the source of much needed Foreign Direct Investment(FDI). The blacklisting also means that some EU initiatives in Botswana like the Trade Export Help Desk, whose main mandate is to facilitate local companies' ability to find export markets in the EU's member states, is going to be significantly and negatively impacted.

In a time when the country is still grappling with how it is going to economically recover from the effects of the COVID-19 crisis, the blacklisting by the EU adds salt to an already gaping wound. The promotion of an export-led economy— which has been one of the ways identified by the current administration heralded by President Masisi to diversify the country's economy in order to move away from overreliance on minerals especially diamonds— will be dealt a huge blow because with the country now blacklisted by the EU, which has a total of about 450 million consumers and a collective GDP of around USD 16.6 trillion.

With imports exceeding USD6.7 trillion and FDI outflows of over USD585 billion, the importance of the EU as a trade partner cannot be overstated enough. Botswana exported about USD 54.1 billion an export market which has now been reduced or in the worst-case scenario—totally lost.

When a country in desperate need of economic diversification is blacklisted by the world's second-largest consumer market and source of FDI, it is imperative for citizens to ask what exactly caused the debacle that the country finds itself in because their entire livelihoods depend on such questions being answered. As aforementioned, according to the commission which released the report, the reason for Botswana being listed is that the country has been shown to lack stringent and effective measures to tackle money-laundering and/or financing of terrorism.

The country's lethargy in tackling manifestations of corruption, which are most of the time precursors to instances of money laundering etc, has long been apparent. Over the last few years, cases of public funds being looted by high ranking public officials have almost been incessant. On the campaign trail prior to winning the 2019 general election, the current administration touted the fight against corruption as one of its top priorities should they assume office but so far, no public funds have been recovered as a result of this "fight" and none of the culprits have felt the full wrath of the law.

We do not exist in a bubble so when such lassitude in the fight against those ills is left to persist, international bodies and potential sources of FDI are watching and taking notes and we end up in situations like the one which has befallen the country. The importance of comprehensive and efficient measures for tackling corruption in order to facilitate a feasible economic environment cannot be touted enough. The way a country's economic environment is set up and perceived by the rest of the world is what the due diligence performed by these international bodies and other sources of potential FDI always sets out to determine and is usually the deciding factor of whether they decide to invest and associate with the said country or not.

The irony of Botswana's blacklisting by the EU is that just last week, the country was ranked first by The Economist in its list of emerging economies ranked in terms of financial strength. The fact that all that good work in ensuring financial strength is going to be undone by the actions of a few greedy and insatiable individuals demonstrates the urgent need for the country to stop the proliferation of corruption and reinstate its good standing in the eyes of the world in terms of social and economic policies.

One of the many ways by which the COVID-19 crisis is going to hurt emerging economies like Botswana's, per The Economist, is by damaging their export earnings and deterring foreign capital, the same areas which are going to be affected by the blacklisting by the EU. This double whammy further complicates the country's post-COVID-19 economic recovery and how it will get through all that is difficult to see. It is in these difficult and trying times that a country's leadership is put to the ultimate test. Whether Botswana's leadership will pass the test remains to be seen but one thing that is for certain is that the country's entire being depends on them passing that test. No pressure at all.

Comments

  1. Very interesting article 👌

    ReplyDelete
  2. Quite and enlightening article🙏🙏

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  3. Thank you for this... The problem with local production, though it's good is that Botswana is not an industrial country, how do we then tackle and get ourselves out of the black list? Get rid of corrupt leadership? Sustain ourselves?

    ReplyDelete
    Replies
    1. tackling corruption provides us with our best fighting chance but we need to devise new ways of going about this fight.please check out my article below on how to do this:

      https://www.someblackguythoughts.com/2020/02/is-botswana-government-taking-wrong.html

      Delete

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